Will Tariffs Become a Boon or Bane to the Solar Industry?
Hello there, and welcome back to our blog! Here at RGS Energy, you could say we are somewhat invested in the world of solar energy. For over 30 years, we have been providing residential and commercial solar installation services and, through these decades of experience, we have seen many ups and down in the solar industry. In an encouraging shift, we have witnessed solar energy evolve from a simple novelty into a form of energy production that is becoming more and more viable for the average homeowner to take advantage of. Like most products, solar panels are made in multiple countries and, up to this point, the United States had no issue with allowing imported solar panels to be brought into the US for use by American solar companies. Today, this free movement of solar panels could change. Today marks the day where federal trade officials will recommend measures to place tariffs on imported solar panels, a move that they say will help to boost the domestic solar market and create more jobs in the United States. In today’s post, we wanted to take some time to go over these proposed tariffs, the possible impact they will have on the US solar market, and how these proposals could shape the future of solar in America.
Why are Tariffs Being Proposed?
Trade, especially trade as it is conducted in the modern global economy, is an interesting thing. Nations figured out quite a while ago that trade among nations is not always equal. Some countries are able to produce certain goods at much lower prices than other countries due to a large number of factors relating to workforce, natural resources, and the quality of the product being produced. While cheaper imported products are a good thing in some ways, too many imported goods can work to disrupt the domestic market of a given country. This argument is the main one being used in relation to the proposed tariffs on imported solar panels. Two international solar panel producers that have production facilities in the United States claim that they need tariffs to be put in place on imported solar panels in order to protect them from the low costs of these panels. On the other side of the argument, most workers in the solar panel industry see these low-cost imports as a crucial supply chain that is needed in order to meet the growing demands of residential and industrial solar installations in the US.
The proposed tariffs came about because of the efforts of Suniva and SolarWorld Americas. Suniva, a Hong Kong based solar panel producer with plants in Michigan and Georgia, laid off 130 workers in March and, less than a month later, filed for bankruptcy. Similarly, SolarWorld Americas, a German-based firm with a plant in Oregon that produces silicon photovoltaic panels laid off 360 workers at its plant, claiming that the move had to be made because of the fierce competition that the company faces due to cheaper imported panels. With approximately 80 percent of silicon panels in America supplied through imports, the aforementioned solar panel providers claim protections must be put in place in order to create a competitive, American-based market.
Is a Tariff the Best Choice for American Solar?
Trying to determine whether or not placing a tariff on imported solar panels is a sticky issue. From the perspective of American solar panel producers, a tariff would be a good thing because it would allow them to compete against the foreign panels that are flooding the American market. Competition means that more Americans could be employed at plants that produce solar panels, creating more domestic jobs and, theoretically, stimulating the local economies where the plants are based. On the other side of the coin, placing a tariff on imported solar panels would, without a doubt, raise the prices associated with solar panels, placing a strain on an industry that is just now getting on its feet. According to certain authorities in the solar industry, the proposed tariff could force solar companies to close, lead to the loss of tens of thousands of jobs, and cause some serious damage to the solar industry as a whole.
Based on the latest statistics provided by the Solar Energy Industries Association, The US solar sector has grown to include approximately 40 manufacturing plants, over 9,000 installation companies, and employs around 260,000 people. Last year alone, utility-scale solar arrays produced 37 percent of new electrical generating capacity in the United States and solar firms added 14.7 gigawatts of new generating capacity. Across the board, solar experts agree that this level of growth in recent years has only been possible because of the abundance of imported solar panels, many of which cost around a third of what they did 3 to 4 years ago.
What Does the Future of Solar Hold?
At this point, the future of solar in the United States is in a state of limbo which, for nearly everyone involved, is a bad thing. Until a decision is reached by the federal government, solar companies in the US must sit on their hands and wait to see if the pricing structures that they have established over the last few years are still viable with the possibility of a tariff on the horizon. This uncertainty has already led to an increase in the price of solar panels, especially in relation to the utility-scale solar sector, further disrupting an industry that needs as much help as possible finding a foothold in the American energy sector.
Here at RGS Energy, we are not able to predict the future. The proposed tariffs on our industry may help the industry or they may hurt it, only time will tell. What we do know for sure, is that if you are interested in learning more about the benefits of solar energy and the money you can save by switching to solar, we are the best company to go with. As innovators in the United States solar energy market, we have the experience, knowledge, and expertise that is needed to make sure that our solar arrays are not only installed to stand the test of time but are also installed in such a way as to maximize the amount of solar energy that is collected on a daily basis. If you are interested in learning more about the services that we provide, please do not hesitate to fill out our contact form, or give us a call at (877)-747-4338. We will answer any and all questions you may have surrounding solar energy and work with you to come up with a solar plan for your home.